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Future Work report: governments’ role in creating jobs we can count on

Last week Future Work released its report Raising the Bar. This report looks at how governments have the potential to use their spending power to strengthen wages and labour standards in the interests of building a fairer, more inclusive economy.

The report examines governments’ roles in areas such as wage stagnation and growth and job stability. The effect of wages caps is one of the issues Dr Stanford’s report covers, saying:

“But perhaps the most damaging, if unintended, consequence of the arbitrary suppression of public sector compensation is its spillover impact on wage trends across the broader labour market – including among private sector employers.”

“… governments at both the national and state levels have aggressively repressed normal wage determination processes – with negative consequences for wages and working conditions that are felt across the broader labour market.”

“Public sector wage caps establish a highly visible benchmark for wage determination elsewhere in the economy, automatically influential since they are implemented by the largest employers in the country. Private firms which supply government will invoke the government’s wage cap as justification for their own wage restraint measures, in order to “stay competitive” with their biggest customer.”

We know Premier Will Hodgman, as a decision maker can make a difference to the wellbeing of Tasmanians, if he chooses to byscrapping the wages cap.